Obama and the Politics of Short Memories

Posted on Jun 14, 2009

By E.J. Dionne Jr.

Business has been on the ropes since last fall’s financial collapse, but the first glimmerings of recovery are calling forth a capitalist counteroffensive.

It’s one thing for President Obama to face off against Fox News, the right-wing radio empire, and Republican congressional leaders whose names are unfamiliar to much of the public. It’s quite another to confront organized business.

That’s why last week’s announcement by the U.S. Chamber of Commerce of a new “Campaign for Free Enterprise” could be one of the year’s most consequential political developments. Now the real resistance to Obama begins.

As long as the global economy was crumbling, business held back and even welcomed the infusion of hundreds of billions of government dollars to prop up the system. Business leaders, like everyone else, were frightened to death. They welcomed Big Government’s exertions to keep the banks alive and gin up consumer purchasing power.

It is an odd tribute to the short-term success of Obama’s recovery effort that the business lobbies now feel free to return to the old-time religion of bashing government and singing the praises of the unfettered marketplace. You might expect the corporate guys to show a little gratitude to the government that bailed them out. But that’s never been their way. They’d rather pretend that the last nine months were a bad dream.

Thus the Chamber’s new offensive. In his statement announcing its campaign, Thomas J. Donohue, the group’s president and CEO, tried to brush by the recent unpleasantness as quickly as possible.

“Dire economic circumstances have certainly justified some out-of-the-ordinary remedial actions by government,” he declared. “But enough is enough. If we don’t stop the rapidly growing influence of government over private sector activity, we will squander America’s unmatched capacity to innovate and create a standard of living and free society that are the envy of the world.”

“Enough is enough” is a hallowed slogan in American politics, and Donohue was trying to draw a bright line between yesterday’s implosion and today’s relative stability. The implication is that the danger has passed, that far-reaching reform is unnecessary, and that we can return, quite literally, to business as usual.

The Obama administration, which has largely had things its own way so far, would do well to take this declaration of war seriously. Until now, Obama has been able to occupy the broad middle ground of American politics. Many who were unhappy with how aggressive the government had to be to get the economy rolling nevertheless accepted the need for Washington to act boldly.

Even those who were committed to free enterprise in theory knew that the system had in practice broken down. When a sturdy libertarian of the stature of Judge Richard Posner offers a volume called “A Failure of Capitalism,” the system’s defenders know they’re in trouble. That’s why they’re fighting back.

We have been in this place before. In her pathbreaking book “Invisible Hands,” historian Kim Phillips-Fein traces the roots of the contemporary right to the reaction of business against FDR’s New Deal. She reminds us of the rise of the anti-Roosevelt, pro-business Liberty League, which condemned the New Deal’s “ravenous madness.”

The league’s rhetoric is familiar, if overheated. “Businessmen are denounced officially as ‘organized greed,’ ‘unscrupulous money changers’ who ‘gang up’ on the liberties of the people,” went one of the league’s typical screeds. “The dragon teeth of class warfare are being sown with a vengeance.”

We can credit the Chamber’s Donohue for avoiding such an unsightly mixed metaphor, but there are real teeth in his implied threats to Obama’s program of imposing new rules on a system that went off the rails.

Among other things, the Chamber promises “legal action to challenge unconstitutional and unlawful government regulations.” Might that presage—again, the New Deal parallels are striking—a battle between a progressive president and a conservative Supreme Court?

Obama’s preference is to transcend conflict, not confront it. He has been careful to present himself as a defender of free enterprise (as FDR did) and to insist that only unfortunate chance has made him the arbiter of the fate of banks and car companies.

Yet the paradox is that if the recovery continues, as Obama hopes it does, support for change will weaken, those threatened by change will be emboldened, and slogans only recently discredited will be revived. The greatest danger to Obama’s plans comes not from the Republican Party, but from how short our memories are.